Ram Trucks in America - Essay Example

? RAM Trucks Brief History of Trucks in America Trucks have a history dating back to 1971 when a certain group resolved to form a non-profit making organization called the American Truck Historical society (ATHS). This organization was solely created to keep records on the price trend, movement and depreciation of the trucks of the entire industry. The data was meant to assist in tracking the trucks on hoc basis. This organization was later legally recognized by the ECATA, Inc. (Anderson, 2009). It has produced magazines and other forms of auto car industry in order to boost the sales of the trucks in the automobile market. It has developed and grown over time. It has membership eighteen thousand members. This organization has sixty-eight branches. It is headquarter is in Birmingham, and it covers an area of three thousand square foot. In addition is has a library that has over seventy-five thousand photos of trucks, and nine hundred trucking books. It has also ten thousand sales vouchers and videos featuring trucks in the show room. History of the RAM truck The first man to build a mobile Truck is Gotttlieb Daimler. This German invented a truck which used a horse power engine and a belt drive. This belt drive had both forward and reverse speeds. This pioneer is the one who invented the first taxi and motorcycle in the year 1897. Ernest Holmes contributed immensely to the development and growth of this industry of RAM trucks. He helped in the retrieving of a colleague’s car in the year 1913. This was done through the use of a chain, a puller and three poles. RAM truck was formed in 2009. Its formation was an upgrade of Dodge trucks. The objective of this company was to deal with serious truck customers. Its brand was also established after the parent company formed an alliance with Fiat Company. This alliance led to the use of the Ram brand in selling pick-ups and heavy duty trucks. This took effect in 2010. The current state of the trucking industry The truck industry is pivotal in the economic growth and development of any nation. This is because the transport sector plays a core function in the transport of various goods and services to various destinations for business purpose. For instance, the truck industry enabled the government to earn one hundred and twenty five thousand dollars of revenue in a single year. This revenue was obtained from a total of sixty five thousand truck companies.. Thousands of employees employed in theses companies ensured that necessary tasks were accomplished in order to obtain the returns. This boost on the economy increased the GDP of the nation which in turn led to the provision of social amenities to the society. This increased the living standards of the locals. Furthermore, the truck industry enhanced the refurbishment of the infrastructure hence improving the movement of goods and services within the society. Technocrats were also employed to ensure that traffic rules were adhered to in order to avert accidents which could be committed by errant truck drivers. This owes to the fact that the regulation of the speed leads to efficiency in fuel consumption. The only malpractice which persists is the high level of driver turnover. His leads to disruption of transport services and business transactions. There is lack of communication between the truck drivers and their bosses. This led to inconveniences and strikes within the industry. Furthermore, the drivers of the trucks are paid their salaries based on the miles covered. The law pertaining to the road use applies equally to all people. Therefore, the truck drivers should not infringe on the rights of the pedestrians. The drivers, who are within the truck industry make informed decisions with regard to their driving career. For instance, they ensure that their various are up-to-date. The industry has initiated various programmes that have inculcated skills upon the drivers. This has boosted the professionalism in the truck and transport industries. In fact, this is manifest in the performance of trucks in the market. However, the employment opportunities are restricted to few individuals based on the prospective driver’s experience in driving, past criminal involvement, aptitude tests and physical health. An insurance company has been mandated to protect the truck industry against various risks. For example, Sleep Apnea Insurance company covers a wide range of trucks. Furthermore, the drivers well prepared in all aspects before they join the transport sector. Some get informed through roadshows and informal meetings. Currently the industry has attracted many individuals due to the benefits which accrue from the industry. Some people whose employment contracts have elapsed get a chance in the industry so long as their skills match with the driving career skills. Ram truck industry employs a monopolistically competitive market structure. This is a structure whereby many firms under one firm produce related products. These firms compete against each other hence competition determines the equilibrium prices of trucks of these firms. The truck industry has a variety of trucks which form the monopolistic market structure. The demand for RAM trucks has been high though Chevrolet has had high sales volume in annual sales since 2008 .Chevy trucks have led in with an annual increase of > 29%. Ford trucks have had an increase of > 9% over the years while RAM trucks have had an annual sales increase > 7%. Sales table for RAM trucks over the last three years: Years(#) Sales (no. of trucks) Year 2010 134000 Year 2011 144000 Year 2012 150000 The price elasticity refers to the responsiveness of demand of merchandise to alter in the cost of the product. Therefore, price elasticity of RAM trucks is based on the demand for trucks and the price of the trucks. The price $15M and sales were 134000 trucks. Therefore, price elasticity is 0.089. Given that, Price elasticity = % change in price / % change in demand Demand schedule of RAM trucks over the last 3 years: Years(#) Price ($) Demand (no.of trucks) Year 2010 15M 124000 Year 2011 17M 127000 Year 2012 20M 130000 Graph of RAM demand for the last 3 years: The price trend for RAM, Chevy and Ford trucks is based on the economic trend that prevailed over the period of three years. Price schedule for Chevy, Ford and RAM trucks: Years(#) Chevy truck Price ($) Ford truck price($) RAM truck price($) Year 2010 19M 17M 15M Year 2011 23M 21M 17M Year 2012 30M 25M 20M A graph of the price trend for the three products over the last three years: The above data reveals the degree of appeal attached to each model of truck based on the respective price trends. Chevy trucks perform best with regard to effectiveness and efficiency in task performance. Moreover, it has customized features. When the three models of trucks are compared, no vehicle possesses many capabilities and features. This gives Chevy trucks more appealing given that it has a wide range of appealing features and unique capabilities. This model offers space for cargo and other stuff which can be locked inside the truck. It has also an open space for carrying of big luggage like maize, fertilizer, rice, wheat, and millet. This shows that this model has sufficient space for carrying much stuff. In addition, it is able to tow. It is possible to get the best quality which is the hybrid model. This offers efficient fuel consumption and capability to lift heavy luggage. This guarantees efficient and convenience because heavy load requires consumption of extra fuel hence this is an ideal truck for transportation of heavy stuff. However, the three models of trucks are subject to emissions hence all of them are not environment friendly. Since the power propelled engines have not been invented, and then it is not likely to discard the use of these models. The fuel consumption is determined by the market fuel prices (Kushwah, 2007). For instance, when the price of fuel reached four dollars per a gallon, the stock of trucks increased considerably. This increase of fuel prices was contributed by the economic factors. Indeed, there is a relationship between the sector of housing and the sale of pick-ups. This has negatively influenced the sales of the Ford trucks. However, this favors the other two models of trucks in which Chevy and Ram increases. The local manufacturers of trucks have made good sales owing to the drop of fuel prices by a large margin. The Three truck models are strong and tougher. Moreover, they are well customized. This is manifest in their appealing names like Chevrolet Silverado for Chevy model, Dodge Ram for RAM model and Ford F-150 for the Ford trucks. Chevy trucks have a resemblance in design to the Japanese truck models. This is one of the reasons as to why it has led the other models in sales volume since 2008. Japan possesses advanced technology in vehicle manufacturing and the vehicle spare parts. Therefore, there are many advantages in the association of Chevy trucks management with the Japanese (Froeb, 2010). A Truck show was held in the year 2007.Chevy Silverado won the match with high scores. It was closely followed by the RAM, then the Ford 150 truck. This made the last two trucks to do a restructuring and redesigning in order to improve in quality and sales volumes. Chevy trucks still emerged top in competitions held in Texas while the Ford and RAM trucks took the second and third position respectively. The possible challenges, which will face this industry in the next five years include a drop in the demand for trucks and the increase of prices of spare parts of the vehicles which will lead to the high cost of production. The decline in demand will be as a result of new classic models of trucks in the market. This will take the majority of the clients of RAM company hence low demand for the RAM company trucks. In addition, Chevrolet and Ford trucks are likely to withdraw from RAM Company in order to form a partnership because they are the best performing model of trucks currently. This move is aimed to truck market leaders. The managers will like to add more features into this brand of trucks in order to diversify their markets hence enlarging their market niche. Fuel prices are likely to shoot up soon. This will also be a big challenge given that this commodity is required in servicing the vehicles. References Froeb, L. M., & Mc Cann, B. T. (2010). Managerial economics: A problem solving approach. Mason, OH: South-Western Cengage Learning. Kushwah, R. B. S., & Kumar, V. (2007). Economics of protected areas and its effect on biodiversity. New Delhi: APH Pub. Corp. Anderson, D. R., Sweeney, D. J., & Williams, T. A. (2009). Statistics for business and economics. Mason, OH: Thomson South-Western. Read More